They are in a seasonal business and they just lost the holiday season big time. They are now going to spend the rest of the year digging out of the hole they made for themselves and try to minimize the losses by getting rid of the unsold hardware. They can try giving them away (like last year) or by selling at a loss. Or, they can open them up and let consumers get full value out of the hardware and make a dent in the inventory.

B&N is simply too obsessed with lock-in for its own good.
Having a cheaper tablet is good. Giving the tablet an sd card slot is very good. Keeping the user from using the tablet for all it can do? One giant "aw-crap" that wipes out the added value of the price and the card slot. Lock-down works for single function devices but for multifunction devices you either meet all customer needs yourself or you get out of the way and let them find the apps themselves.

What they need is a device that meets customer needs at least as well as B&N's needs. Their problem is overreach; the locked the android tablets looking to make money off the apps but they don't have enough apps to justify the lockout.

They are on third *third* generation of android tablets.
First, they pretended the Nook Coor wasn't a tablet, just a color reader.
Then, they called it a tablet and gave it a placeholder app store. After two years there are still tumbleweeds in the aisles of their "store".
The new tablets? Those come with a cumbersome and obscure backdoor to install arbitrary apps "for testing" so their staff clearly knows it is an issue and just as clearly are handcuffed by corporate policy.

So B&N, after two-plus years, is still unable or unwilling to give consumers a robust and useful appstore and are still trying to lock them in to an empty store; they don't make money off the lockdown but they do detract from the devices' value. Nobody wins. (Except maybe Google and Amazon.)

What B&N doesn't seem to grasp is that each product needs to stand on its own and deliver value on its own merits. That satisfying the customer has to come before their own strategic needs. To make money by locking-in customers into the Nook content ecosystem, first they have to sell them the device that locks them in. And if the device doesn't meet customer needs they won't buy into the device or the ecosystem.

We're past the point where Nook gets a free pass as a startup; they've been doing reading devices for four-plus years, android tablets for two-plus years. If they haven't gotten it right yet, when are they?

At this point it is clear they are not going to deliver a competitive app store any time soon. All they can do is open the thing up and let the customers fend for themselves. Or, they can just get out of the tablet business.

Better yet, sell off Nook Media to somebody who won't cripple it and run it into the ground with short-sighted policies.

I agree with your assessment.

I'd add that B&N also failed to properly leverage their B&M stores. They started out well, offering eCoupons to nook owners and free ereading on site. But they could've done so much more to offer value to consumers who purchased nook devices.

B&N earned (well deserved IMO) kudos from the techies when the nook color was released for the inclusion of a microSD card slot, and their light touch on locking the NC down. They received plenty of good will and sales of the nook color (pre-kindle fire) were impressive for a "dedicated" device. In hindsight I wonder whether it (light lockdown) was more of technical incompetence rather than a deliberate technical design decision.

I was hoping that they would've released a generation of nook color that offered a B&N UI color ereader mode by default but had the option for selecting "advanced mode" that would enable a standard Android UI. They've gone in the opposite direction.

I don't think that it is too late for them. Amazon had doubled-down on the lockdown of the Kindle Fire line, and it is the right decision for them at this time, but B&N could take a contrarian approach to differentiate itself.

Although B&N never had the best prices on anything they sold, I always found visiting the store to be a pleasant experience. I would buy from them rather than from somewhere else online to support a local business and for the instant gratification of walking in, finding a gem of an esoteric foreign film on DVD, and returning home to watch it. Unfortunately, there weren't enough who agreed with me and the local B&N closed nearly 2 years ago.